Tuesday, September 01, 2009

Morning Briefing for September 1st: Watching Downside Levels

After bouncing higher late in yesterday's session and during the early portion of overnight trade, we've seen the S&P 500 e-mini (ES) futures (above; 60 min. chart) fall back beneath the lows of 8/27 and yesterday (8/31). I am watching those prior low levels closely to see if we can stay within the overnight trading range vs. sustain a downtrend by decisively taking out those lows. How the market responds to the 9 AM CT economic numbers is likely to play a key role in that regard.

We continue to see deterioration among the indicators. As the morning tweet reported (follow Twitter stream here), we're seeing fewer stocks in my basket trading in uptrends and only 56% of all stocks are now trading above their 20-day simple moving averages. We also seeing an increase in the number of stocks registering fresh 20-day lows.

A number of traders are taking their vacations ahead of the Labor Day holiday; that contributed to slow trading and a narrow day session range yesterday. I'll be watching relative volume closely to see how much opportunity shapes up over the remainder of this week. Today's ISM data and Friday's unemployment report should provide at least some interest and activity.